My bid for a condo (built 1960) has been accepted. I was going through the HOA meeting minutes and it looks like they're planning to reclad the Stucco siding and replace the exterior windows. There are 88 units in the building and mine is one of the largest 3 bedroom units. The HOA has about 1M in reserve. They are currently adding about 155K to the reserve every year from the difference in operating expenses and income. There are no ongoing lawsuits/legal expenses.

I'm worried that the siding reclad and window replacement will cause a huge special assessment within the next year or so. I'm ok with paying up to 30K, but I don't want to get hit with a 40K+ assessment as soon as I buy the condo. Also, I'm concerned that since about 40% units are being rented out, there might be a problem if the owners decide not to pay their share of the assessment.

I've never owned a condo before so I'm eager to hear people's opinions about the likelihood of a major debacle here.

I've owned 2 condos over the years. The HOA board has always been able to tell us where the funds from projects are coming from. They should know how much is coming from reserves versus how much additional they will need to collect (if any). Also should be able to tell you how they will handle the special assessment billing (how much is allocated to 2 bedroom vs. 3 bedroom units, etc.). Talk to the treasurer or the President of the HOA

Having lived in condominiums for 30 of the past 40 years, I would walk away from any building that was 40% rental. The goals of absentee owners and resident owners are usually not the same and any repairs or improvements would become a major issue. With 40% of the units rented, 85% of the resident owners would have to agree to pass a resolution requiring a simple majority.

If you really want to go ahead with this purchase, I suggest you add a contingency to your purchase offer for full disclosure of how the association plans to pay for this proposed refurbishment and how much of the likely special assessment will be charged to the unit you propose to purchase. If you don't get a satisfactory answer, walk away.

Sounds like the HOA has sufficient reserves and replenishes them appropriately. Due diligence before buying would include investigating reserves and upcoming repairs and expenses and ensuring that the HOA has sufficient insurance coverage. The HOA should be willing to provide information about the finances including board meetings and information about plans for upcoming repairs and major expenditures.

denovo suggested you check the reserve study. That was the first and the best answer in my opinion. It is also sometimes called a major component study. Our association is responsible for streets and sidewalks in addition to other things. The reserve study assumed the cost of replacing the trails at less than half the amount on bids we have received so far. So even if there was a reserve study they are not immune from mistakes. But do enough due diligence now that you aren't surprised later. Good luck.

The reserve study from mid 2017 suggests a ~30K deficit per unit and includes the cost of replacing siding, windows and roof. I'm a little worried that this will be higher for my unit than others because of the larger size.

I did a quick calculation about what this might be for my unit if it is split up in the same ratio of the monthly HOA fees. That would make it about 60K. Is that how it usually works?

As a current board member, I have learned to really focus on the board. Read the meeting minutes and talk with someone on the board. Are they competent? If so, ask them about the expected cost range. Management competence is most important.

The reserve study from mid 2017 suggests a ~30K deficit per unit and includes the cost of replacing siding, windows and roof. I'm a little worried that this will be higher for my unit than others because of the larger size.

I did a quick calculation about what this might be for my unit if it is split up in the same ratio of the monthly HOA fees. That would make it about 60K. Is that how it usually works?

> if it is split up in the same ratio of the monthly HOA fees

So the HOA fees are different for different units? Then you can expect the same split for any assessment. The HOA documents will prescribe exactly how this is to be done.

As noted, a large fraction of rented units is undesirable although I would not go as far as some, at the right price it might still be a buy.

As also noted, there is no choice about paying assessments. However sometimes some sort of financing arrangement is offered.

My bid for a condo (built 1960) has been accepted. I was going through the HOA meeting minutes and it looks like they're planning to reclad the Stucco siding and replace the exterior windows. There are 88 units in the building and mine is one of the largest 3 bedroom units. The HOA has about 1M in reserve. They are currently adding about 155K to the reserve every year from the difference in operating expenses and income. There are no ongoing lawsuits/legal expenses.

I'm worried that the siding reclad and window replacement will cause a huge special assessment within the next year or so. I'm ok with paying up to 30K, but I don't want to get hit with a 40K+ assessment as soon as I buy the condo. Also, I'm concerned that since about 40% units are being rented out, there might be a problem if the owners decide not to pay their share of the assessment.

I've never owned a condo before so I'm eager to hear people's opinions about the likelihood of a major debacle here.

Thank you very much for your post. We have heard horror stories about this exact same issue and we have avoided condos ownership for this very reason. We prefer to control our own destiny and spending.

I did a quick calculation about what this might be for my unit if it is split up in the same ratio of the monthly HOA fees. That would make it about 60K. Is that how it usually works?

Almost certainly the assessment will be divided up percentage wise like HOA fees, i.e. you pay more if you have a larger unit.

Markets vary, but I would be concerned about having 40% of the units as rentals. That's 40% of the people living there who have no stake in making it a good place to live, or want to put energy into keeping it up.

I'm on the board of my condo and we were headed toward 50% rentals because the units have been such good investments. We passed (with 75% unit owner concurrence, including a majority of the owner/renters) an amendment that future sales could no longer be a rental. That was three years ago. We're getting down toward 25% rentals and it will go lower in future years. It's a much better place to live.

Last edited by Steelersfan on Sun Mar 11, 2018 7:18 pm, edited 1 time in total.

I did a quick calculation about what this might be for my unit if it is split up in the same ratio of the monthly HOA fees. That would make it about 60K. Is that how it usually works?

Almost certainly the assessment will be divided up percentage wise like HOA fees, i.e. you pay more if you have a larger unit.

Markets vary, but I would be concerned about having 40% of the units as rentals. That's 40% of the people living there who have no stake in making it a good place to live, or want to put energy into keeping it up.

I'm on the board of my condo and we were headed toward 50% rentals because the units been such good investments. We passed (with 75% unit owner concurrence) an amendment that future sales could no longer be a rental. That was three years ago. We're getting down toward 25% rentals and it will go lower in future years. It's a much better place to live.

I'm on the board of my condo and we were headed toward 50% rentals because the units been such good investments. We passed (with 75% unit owner concurrence) an amendment that future sales could no longer be a rental. That was three years ago. We're getting down toward 25% rentals and it will go lower in future years. It's a much better place to live.

Has that affected condo prices?

They've continued to go up at about the same rate as before. We've hit records highs in individual unit sales prices each of the last three years.

As others have said, you need to find out how much will come from reserves and how much will be a special assessment. If this cladding was not accounted for (or is coming much quicker) in the reserves, it may all be special. Saying they have X dollars on its own doesn't mean anything if it is designated for other things.

We only allow 10% of the units in our association to be rented (there are some hardships exceptions). To get a conventional/conforming mortgage you usually need 51% owner occupied.

i've been looking at condos if i can find one that is walking distance to the downtown square where the restaurants/entertainment are located. both of the new/newish properties i've looked at have a 10% maximum limit on rentals. having seen the condo where my mom lived go from primarily owner to primarily rental -- there is a reason for the rental limitation. as others have said -- i would stay away from a property that is 40% rental.

fwiw bruce williams -- the famous talk radio financial advice guy -- hated condos and townhouses becasue of the never ending threat of special assesments.

i've been looking at condos if i can find one that is walking distance to the downtown square where the restaurants/entertainment are located. both of the new/newish properties i've looked at have a 10% maximum limit on rentals. having seen the condo where my mom lived go from primarily owner to primarily rental -- there is a reason for the rental limitation. as others have said -- i would stay away from a property that is 40% rental.

fwiw bruce williams -- the famous talk radio financial advice guy -- hated condos and townhouses becasue of the never ending threat of special assesments.

The reserve study will tell you the anticipated cost and in what year, but the yearly budget will tell you the source of the funds if they plan to move forward in this budget year. Check the yearly budget.

This is the problem we're having in my 15 unit condo building. I'm HOA president, purely because nobody else would do it. When we purchased in Dec 2015, the building was 100% owner occupied, albeit 3 of the owners were part time and would only spend a few months a year in town, but they were still actively engaged. Now we have 5 units which have been purchased and rented out, and it's really causing problems. The renters themselves are fine, but the owners don't seem to want anything to do with the running of the building. A couple of the other owners are elderly and not really interested in participating in building matters, except to complain about a special assessment we had to do last year, so we're now down to just 3 or 4 people in the building who are basically trapped on the HOA board. If any of us sell and leave, and others are simply unwilling, we don't won't have enough people to actually comprise a full board. Wish I'd thought of this before I bought the place!

This is the problem we're having in my 15 unit condo building. I'm HOA president, purely because nobody else would do it. When we purchased in Dec 2015, the building was 100% owner occupied, albeit 3 of the owners were part time and would only spend a few months a year in town, but they were still actively engaged. Now we have 5 units which have been purchased and rented out, and it's really causing problems. The renters themselves are fine, but the owners don't seem to want anything to do with the running of the building. A couple of the other owners are elderly and not really interested in participating in building matters, except to complain about a special assessment we had to do last year, so we're now down to just 3 or 4 people in the building who are basically trapped on the HOA board. If any of us sell and leave, and others are simply unwilling, we don't won't have enough people to actually comprise a full board. Wish I'd thought of this before I bought the place!

The percentage of renters will effect how easily loans can be obtained for the property. The higher the percentage of renters, the more challenging and or more costly loans will be on the property and this ultimately will infringe on the property value. The board can pass a resolution capping the number of rentals in the building, but that cat may already be out of the bag.

This is the problem we're having in my 15 unit condo building. I'm HOA president, purely because nobody else would do it. When we purchased in Dec 2015, the building was 100% owner occupied, albeit 3 of the owners were part time and would only spend a few months a year in town, but they were still actively engaged. Now we have 5 units which have been purchased and rented out, and it's really causing problems. The renters themselves are fine, but the owners don't seem to want anything to do with the running of the building. A couple of the other owners are elderly and not really interested in participating in building matters, except to complain about a special assessment we had to do last year, so we're now down to just 3 or 4 people in the building who are basically trapped on the HOA board. If any of us sell and leave, and others are simply unwilling, we don't won't have enough people to actually comprise a full board. Wish I'd thought of this before I bought the place!

The percentage of renters will effect how easily loans can be obtained for the property. The higher the percentage of renters, the more challenging and or more costly loans will be on the property and this ultimately will infringe on the property value. The board can pass a resolution capping the number of rentals in the building, but that cat may already be out of the bag.

How would a mortgage company know what percentage of rentals is in the building?

This is the problem we're having in my 15 unit condo building. I'm HOA president, purely because nobody else would do it. When we purchased in Dec 2015, the building was 100% owner occupied, albeit 3 of the owners were part time and would only spend a few months a year in town, but they were still actively engaged. Now we have 5 units which have been purchased and rented out, and it's really causing problems. The renters themselves are fine, but the owners don't seem to want anything to do with the running of the building. A couple of the other owners are elderly and not really interested in participating in building matters, except to complain about a special assessment we had to do last year, so we're now down to just 3 or 4 people in the building who are basically trapped on the HOA board. If any of us sell and leave, and others are simply unwilling, we don't won't have enough people to actually comprise a full board. Wish I'd thought of this before I bought the place!

The percentage of renters will effect how easily loans can be obtained for the property. The higher the percentage of renters, the more challenging and or more costly loans will be on the property and this ultimately will infringe on the property value. The board can pass a resolution capping the number of rentals in the building, but that cat may already be out of the bag.

How would a mortgage company know what percentage of rentals is in the building?

I believe they follow with the association for details. The percentage of renters was a huge problem for us as it limited mortgages to new buyers and put us into a spiral. In addition, while we could put liens on properties that did not pay monthly fees or special assessments, those fees could only be recaptured at sale...which were few and far between...because of the dificulty in getting mortgages. was quite the nightmare. Bought my unit for $140,000 and did sell it 12 years later for $92,000.

How would a mortgage company know what percentage of rentals is in the building?

The HOA or equivalent provides information about that. My co-op allows a small percentage of approved sublets and reports the number in each near-monthly newsletter as part of the summary of board meetings.

People who lie about it or who misrepresent their intentions to a mortgage company are increasingly easy to detect:

This is the problem we're having in my 15 unit condo building. I'm HOA president, purely because nobody else would do it. When we purchased in Dec 2015, the building was 100% owner occupied, albeit 3 of the owners were part time and would only spend a few months a year in town, but they were still actively engaged. Now we have 5 units which have been purchased and rented out, and it's really causing problems. The renters themselves are fine, but the owners don't seem to want anything to do with the running of the building. A couple of the other owners are elderly and not really interested in participating in building matters, except to complain about a special assessment we had to do last year, so we're now down to just 3 or 4 people in the building who are basically trapped on the HOA board. If any of us sell and leave, and others are simply unwilling, we don't won't have enough people to actually comprise a full board. Wish I'd thought of this before I bought the place!

The percentage of renters will effect how easily loans can be obtained for the property. The higher the percentage of renters, the more challenging and or more costly loans will be on the property and this ultimately will infringe on the property value. The board can pass a resolution capping the number of rentals in the building, but that cat may already be out of the bag.

How would a mortgage company know what percentage of rentals is in the building?

I believe they follow with the association for details. The percentage of renters was a huge problem for us as it limited mortgages to new buyers and put us into a spiral. In addition, while we could put liens on properties that did not pay monthly fees or special assessments, those fees could only be recaptured at sale...which were few and far between...because of the dificulty in getting mortgages. was quite the nightmare. Bought my unit for $140,000 and did sell it 12 years later for $92,000.

It is not entirely true that the only option is to wait for a sale to collect.

In many jurisdictions the condo board can take possession of the condo and rent it out. If there is already a tenant, so much the better, the condo simply collects the rent until the debt is paid, while paying no property taxes or mortgage. If the property is foreclosed by the lender or the state for taxes, then the new owner will at least pay current charges. It is important that the board not allow a debt to become too large before forcing legal action.

This is the problem we're having in my 15 unit condo building. I'm HOA president, purely because nobody else would do it. When we purchased in Dec 2015, the building was 100% owner occupied, albeit 3 of the owners were part time and would only spend a few months a year in town, but they were still actively engaged. Now we have 5 units which have been purchased and rented out, and it's really causing problems. The renters themselves are fine, but the owners don't seem to want anything to do with the running of the building. A couple of the other owners are elderly and not really interested in participating in building matters, except to complain about a special assessment we had to do last year, so we're now down to just 3 or 4 people in the building who are basically trapped on the HOA board. If any of us sell and leave, and others are simply unwilling, we don't won't have enough people to actually comprise a full board. Wish I'd thought of this before I bought the place!

The percentage of renters will effect how easily loans can be obtained for the property. The higher the percentage of renters, the more challenging and or more costly loans will be on the property and this ultimately will infringe on the property value. The board can pass a resolution capping the number of rentals in the building, but that cat may already be out of the bag.

How would a mortgage company know what percentage of rentals is in the building?

It's got to be lower than that for new buyers to qualify for an FHA backed mortgage. Whether that's important depends on local market conditions. In my area few condos bother to qualify for FHA mortgages because there are plenty of lenders who will supply mortgages. In other markets it might be really important.

I just joined the board of my condo complex and it's been enlightening to say the least. We have a limit of 25% rentals and currently have several under investigation for "illegal" renting. Meaning we impose daily fines until the tenant moves out and then have a lien against the property. For unpaid fines, we can also boot/tow vehicles associated with the delinquent unit. The previous board busted 10+ units for illegal renting. I've lived here almost seven years and we've never had a special assessment.

I've lived here almost seven years and we've never had a special assessment.

I've lived in my condo for 15 years. After an assessment in the first year when operating cash dropped to zero due to a derelict board, I haven't had one since. That board was replaced and we now have very adequate reserves and no assessments in sight.

It's important to know the level of reserves, and the quality of the condo board.

Its a very conservative board.. they would rather not have a special assessment. They've raised the HOA dues by 10% each year over the last 5 years to start building up the reserves. That being said, the HOA reserves are still underfunded (at 30%) at the moment according to the reserve study. According to the study, the building needs repiping, reclad of the siding and window replacements. Altogether this will cost about 60K in a special assessment for my unit. They will likely need an assessment to fix the plumbing over this year. They are planning to defer the siding and window replacement recommendations from the reserve study until the reserves have built up over time from HOA dues.

At the moment my inclination is to go ahead with buying. Mainly because the location is perfect, the unit is huge and well maintained, and I got it at a reasonable price in a crazy market so the plumbing assessment (the exact value is still unknown to the board) should be within budget for me. Its really hard to judge the long term effectiveness of the board.. they seem to be doing the right things from the face of it. I couldn't find any exorbitant expenses on silly upgrades. And there is no ongoing litigation. Any thoughts about the quality of the board based on these facts?

I would ask how long the current board has been in place, and if there's general satisfaction with them.

That's hard to judge. If you can, find out if there are people trying to get on the ballot to get on the board. Even if they lose, that could indicate some dissatisfaction with what they're doing.

In our case, after the previous board went away, there has been little change in the board and zero people getting on the ballot to replace the current (fiscally responsible) board, That's a very good indication that unit owners are happy with the current direction, even as we (responsibly) slowly raise monthly HOA fees to build up reserves.

It's got to be lower than that for new buyers to qualify for an FHA backed mortgage. Whether that's important depends on local market conditions. In my area few condos bother to qualify for FHA mortgages because there are plenty of lenders who will supply mortgages. In other markets it might be really important.

That's for an FHA (which has other stipulations mentioned in the article). For a conventional mortgage 51% of units have to be owner occupied.

Its a very conservative board.. they would rather not have a special assessment. They've raised the HOA dues by 10% each year over the last 5 years to start building up the reserves. That being said, the HOA reserves are still underfunded (at 30%) at the moment according to the reserve study. According to the study, the building needs repiping, reclad of the siding and window replacements. Altogether this will cost about 60K in a special assessment for my unit. They will likely need an assessment to fix the plumbing over this year. They are planning to defer the siding and window replacement recommendations from the reserve study until the reserves have built up over time from HOA dues.

At the moment my inclination is to go ahead with buying. Mainly because the location is perfect, the unit is huge and well maintained, and I got it at a reasonable price in a crazy market so the plumbing assessment (the exact value is still unknown to the board) should be within budget for me. Its really hard to judge the long term effectiveness of the board.. they seem to be doing the right things from the face of it. I couldn't find any exorbitant expenses on silly upgrades. And there is no ongoing litigation. Any thoughts about the quality of the board based on these facts?

Although the board does seem to be effective, you should ask yourself if you would buy a house with similar issues and if so, what sort of discount you would expect to pay. That the plumbing needing replacing with unknown costs would be a big red flag to me. Replacing siding and windows can also reveal problems and thus unknown costs.

You should also really think about whether or not you want to live in a condo that has such a high proportion of renters. Why not rent? Have you compared the costs of renting vs. buying one of those condos? I can tell you from experience that renters or subletters cause more problems for their neighbors than primary occupants do, on average, and that those problems can be more difficult to resolve efficiently. I would expect a significant discount for this.

I guess what I'm saying is that if something seems cheap, figure out why. There is always at least one reason.

I lived in a townhouse community where the board was comprised of realtors and snowbirds. they were very liberal with the use of other people's money. first and last HOA experience.

I often see comments like this about HOAs. It's no different than saying, "I bought a junky car with poor reviews and wasn't happy with it so I will never buy a car again" or "I ate a breakfast biscuit at Burger King and it was greasy so I will never eat a breakfast biscuit again."

I have lived in townhomes off and on throughout my life, 55 years old now, and I have never had an assessment.

Years ago, I had a couple of special assessments (not very large in percentage or dollar terms) that were eventually incorporated as part of the regular monthly charges when they ended. After that, the board became more proactive about regular increases to keep up with rising costs and also spreading major capital expenditures out over time through financing so that the costs are not born by current shareholders over a short period of time but become part of long-term carrying charges. That also puts inflation to work for the benefit of the shareholders.

I lived in a townhouse community where the board was comprised of realtors and snowbirds. they were very liberal with the use of other people's money. first and last HOA experience.

I often see comments like this about HOAs. It's no different than saying, "I bought a junky car with poor reviews and wasn't happy with it so I will never buy a car again" or "I ate a breakfast biscuit at Burger King and it was greasy so I will never eat a breakfast biscuit again."

I lived in a townhouse community where the board was comprised of realtors and snowbirds. they were very liberal with the use of other people's money. first and last HOA experience.

In the two places I've lived with HOAs, the people were cheap and would have thrown out a board that wasted money. In fact, I've seen in friends buildings people don't want to spend money on things that would actually increase the value of their property (like remodeling the lobby).

I've served on my condo board (68 units)for a number of years. 1M for an 88 unit property is a really nice reserve, of course I don't know the value or size of the condos. Our current board took over after the last board ran our reserve to zero, and had to do a 300k special assessment. It has been really tough to build a reserve, as every time we get to 150k, we are forced to undertake a large project. I am the only one of three board members who will entertain raising dues, but im expecting them to see the light soon.

As for reserve study, we had one done, but we found every recommendation to be a Cadillac. We have called vendors out on several occasions and were told that they could take our money, but we don't really need to do that. So, at best its a guide, and we've found the cost estimates to be really high compared to bids.(No complaint there)

I've served on my condo board (68 units)for a number of years. 1M for an 88 unit property is a really nice reserve, of course I don't know the value or size of the condos. Our current board took over after the last board ran our reserve to zero, and had to do a 300k special assessment. It has been really tough to build a reserve, as every time we get to 150k, we are forced to undertake a large project. I am the only one of three board members who will entertain raising dues, but im expecting them to see the light soon.

As for reserve study, we had one done, but we found every recommendation to be a Cadillac. We have called vendors out on several occasions and were told that they could take our money, but we don't really need to do that. So, at best its a guide, and we've found the cost estimates to be really high compared to bids.(No complaint there)

We limit our rentals to 14 units.

Do you require from your owners some type of notification of the intent to rent the place out? What do you do if the owner did not request such permit? How does the process work?

I lived in a townhouse community where the board was comprised of realtors and snowbirds. they were very liberal with the use of other people's money. first and last HOA experience.

In the two places I've lived with HOAs, the people were cheap and would have thrown out a board that wasted money. In fact, I've seen in friends buildings people don't want to spend money on things that would actually increase the value of their property (like remodeling the lobby).

I think my condo association has seen the light. Fees were increased and we have a bigger reserve. Never had an assessment in 30 years.

I lived in a townhouse community where the board was comprised of realtors and snowbirds. they were very liberal with the use of other people's money. first and last HOA experience.

In the two places I've lived with HOAs, the people were cheap and would have thrown out a board that wasted money. In fact, I've seen in friends buildings people don't want to spend money on things that would actually increase the value of their property (like remodeling the lobby).

I think my condo association has seen the light. Fees were increased and we have a bigger reserve. Never had an assessment in 30 years.

That's good. That is the way it should be. What some people want to do is have the future owners pay for their wear and tear.

Pajamas wrote:
You should also really think about whether or not you want to live in a condo that has such a high proportion of renters. Why not rent? Have you compared the costs of renting vs. buying one of those condos?

Very well said! One problem with a high percent of renters can be with the composition of the condo board. For example, my board has only ONE member who resides on site. The result is that owners who don't live here make decisions for those who do. The OP does NOT want to find himself in that position now or a few years from now as board members turn over.

if something seems cheap, figure out why. There is always at least one reason.

If I were the owner, I'd probably accept a "reasonable price in a crazy market" too in order to get out of a unit in need of numerous repairs with underfunded reserves!

I think your suggestion to consider renting is spot on. It gives the OP time to find out if the community and location is everything it seems to be. Personally, I'd want to be assured that it is before I put myself at risk of large assessments and the aggravation/disruption of upcoming repairs.

Pajamas wrote:
You should also really think about whether or not you want to live in a condo that has such a high proportion of renters. Why not rent? Have you compared the costs of renting vs. buying one of those condos?

Very well said! One problem with a high percent of renters can be with the composition of the condo board. For example, my board has only ONE member who resides on site. The result is that owners who don't live here make decisions for those who do. The OP does NOT want to find himself in that position now or a few years from now as board members turn over.

if something seems cheap, figure out why. There is always at least one reason.

If I were the owner, I'd probably accept a "reasonable price in a crazy market" too in order to get out of a unit in need of numerous repairs with underfunded reserves!

I think your suggestion to consider renting is spot on. It gives the OP time to find out if the community and location is everything it seems to be. Personally, I'd want to be assured that it is before I put myself at risk of large assessments and the aggravation/disruption of upcoming repairs.

We are more than 90% owner occupied and it is a struggle to get people to be on the board and to have a quorum for elections. We only have 35 units though.

I've served on my condo board (68 units)for a number of years. 1M for an 88 unit property is a really nice reserve, of course I don't know the value or size of the condos. Our current board took over after the last board ran our reserve to zero, and had to do a 300k special assessment. It has been really tough to build a reserve, as every time we get to 150k, we are forced to undertake a large project. I am the only one of three board members who will entertain raising dues, but im expecting them to see the light soon.

As for reserve study, we had one done, but we found every recommendation to be a Cadillac. We have called vendors out on several occasions and were told that they could take our money, but we don't really need to do that. So, at best its a guide, and we've found the cost estimates to be really high compared to bids.(No complaint there)

We limit our rentals to 14 units.

Do you require from your owners some type of notification of the intent to rent the place out? What do you do if the owner did not request such permit? How does the process work?

Yes, they must notify our COA property manager, and pay a monthly fee to rent their condo. Minimum 1 year lease, so nothing short term. If the 14-unit cap is met, and there is a waiting list, the oldest rented unit (#1) is not able to renew their lease once it runs up. The board has latitude to grant an exception if an owner plans to return in a year. If an owner does not comply and rents their unit without notifying the board, the board can assess a fine. It's not a perfect system, but at one time there were many rentals, and banks would not loan to buyers and the property values were kept low because of it.

I wasn't in the complex at the time, but i'm told a decade ago, several owners who purchased new in the 80's/90's looked to refinance, and weren't able to because the banks termed the condos non-warrantable, and they pushed to have the rental cap put in place.